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Construction to start this month on new Syracuse University bookstore

Syracuse University bookstore.JPG

Rendering shows planned Cameron Group building that will house Syracuse University's bookstore, a fitness center for students and university employees, and retail shops. Construction is set to start on the long-delayed project this month on University Avenue in Syracuse.
(Cameron Group LLC )

Syracuse, NY -- Construction is set to begin this month on the long-delayed new Syracuse University bookstore that received a 30-year property tax deal from the city after much debate.

Tom Valenti, a principal in the Cameron Group development company, said construction will start on the $20 million project at the southeast corner of University Avenue and Harrison Street near the university's campus by Wednesday or soon afterward.

Wednesday is the deadline set for the start of construction in an agreement between Cameron Group LLC and the Syracuse Industrial Development Agency. However, the developer effectively has 30 days after that to begin construction because the agreement gives the company that long to cure any default.

Valenti said construction will take about 10 months to complete. The company plans to have the bookstore open for SU's fall 2014 semester, he said. The 85,000-square-foot building will be built in front of a parking garage owned by the university.

In addition to the bookstore, the building will contain a fitness center for university students and employees, and retail space.

The city development agency approved the tax deal in July last year by a 4-1 vote. It had a tougher time winning the approval of the Syracuse Common Council. Councilors voted 5-4 in favor of the deal, but not before lots of debate over the merits of giving a private developer such a long tax exemption.

Although Syracuse University will lease the bookstore from Cameron Group, the property will continue to be owned by Cameron Group, a private developer based in East Syracuse.

As a non-profit, educational organization, the university is tax exempt, but property it leases is not. However, Cameron Group told the city that the project would not be financially feasible without a tax exemption because the university was not willing to pay enough in rent to cover property taxes on the building.

Under the payment-in-lieu-of-tax agreement approved last year, Cameron Group will not have to pay property taxes on the 83 percent of the building that SU will lease. The remaining 17 percent of the building, which Cameron plans to lease to retailers, will be taxed.

Over 30 years, the deal is expected to bring in about $1.9 million in property taxes to the city and the county while saving the developer about $9 million. Instead of paying $379,000 in annual property taxes, the developer will pay $64,400.

A disagreement over one aspect of the tax deal almost delayed the project further. Cameron Group objected to a provision in the agreement that bars the company from challenging in court future tax assessments on the building. The company can appeal the assessment to the city's Board of Assessment Review, but it is barred under the agreement from asking a court to lower the assessment.

Property owners normally can challenge their assessments in court if they are dissatisfied with the Board of Assessment Review's decision. However, the city insists that property owners give up any right to a court appeal if they are receiving exemptions via a payment-in-lieu-of-tax agreement.

In the case of the SU bookstore project, the assessment would only affect the taxes paid on 17 percent of the building. But a lawyer for the Syracuse Development Agency told the agency last month that Cameron Group was refusing to execute the agreement because of the provision regarding assessment challenges.

Valenti said the company doesn't like the provision but decided to sign the agreement and begin construction anyway.